Second Amended & Restated Promissory Note



 





Exhibit 10.2




SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE




			
	$3,000,000
	 	Atlanta, Georgia

May 28, 2004







     FOR VALUE RECEIVED, the undersigned, THE ULTIMATE SOFTWARE GROUP, INC., a
Delaware corporation (“Borrower”) promises to pay to the order of SILICON
VALLEY BANK, a California-chartered bank (“Bank”), at such place as the holder
hereof may designate, in lawful money of the United States of America, the
aggregate unpaid principal amount of all advances (“Advances”) made by Bank to
Borrower in accordance with the terms and conditions of the Loan and Security
Agreement between Borrower and Bank dated November 29, 2001 (as amended from
time to time, the “Loan Agreement”), up to a maximum principal amount of Three
Million Dollars ($3,000,000) (“Principal Sum”), or so much thereof as may be
advanced or readvanced and remains unpaid. Borrower shall also pay interest on
the aggregate unpaid principal amount of such Advances, as follows:



     Commencing as of the date hereof and continuing until repayment in full of
all sums due hereunder, the unpaid Principal Sum shall bear interest at the
variable rate of interest, per annum, most recently announced by Bank as its
“prime rate,” whether or not such announced rate is the lowest rate available
from Bank (the “Prime Rate”), plus one (1.0) percentage point above the Prime
Rate, provided however, if at any time Borrower has a net profit for two (2)
consecutive fiscal quarters, the Principal Sum will, so long as Borrower
continues to have a net profit, thereafter accrue interest on the outstanding
principal balance at a per annum rate equal to the Prime Rate, plus one-half
(.5) percentage point above the Prime Rate. The rate of interest charged under
this Note shall change immediately and contemporaneously with any change in the
Prime Rate, provided, however, that the minimum Prime Rate shall always be four
percent (4.0%). All interest payable under the terms of this Note shall be
calculated on the basis of a 360-day year and the actual number of days
elapsed.



     The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:



          (a) Interest only on the unpaid principal amount shall be due and payable
monthly in arrears, commencing June 5, 2004, and continuing on the fifth (5th)
day of each calendar month thereafter to maturity; and



          (b) Unless sooner paid, the unpaid Principal Sum, together with interest
accrued and unpaid thereon, shall be due and payable in full on the Revolving
Maturity Date.



     The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Loan Agreement will not affect the continuing validity of
this Note or the Loan Agreement, and the balance may be increased to the
Principal Sum after any such reduction to zero.



     Borrower further agrees that, if any payment made by Borrower or any other
person is applied to this Note and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any property hereafter
securing this Note is required to be returned by Bank to Borrower, its estate,
trustee, receiver or any other party, including, without limitation, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, Borrower’s liability hereunder (and
any lien, security interest or other collateral securing such liability) shall
be and remain in full force and effect, as fully as if such payment had never
been made, or, if prior thereto any such lien, security interest



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or other collateral hereafter securing Borrower’s liability hereunder
shall have been released or terminated by virtue of such cancellation or
surrender, this Note (and such lien, security interest or other collateral)
shall be reinstated in full force and effect, and such prior cancellation or
surrender shall not diminish, release, discharge, impair or otherwise affect
the obligations of Borrower in respect of the amount of such payment (or any
lien, security interest or other collateral securing such obligation).




     This Note is the “Replacement Promissory Note” described in that certain
Fifth Loan Modification Agreement of even date herewith by and between the
Borrower and the Bank, which Fifth Loan Modification Agreement amends the Loan
Agreement, to which reference is hereby made for a more complete statement of
the terms and conditions under which the Advances evidenced hereby are made.
This Note is secured as provided in the Loan Agreement. This Note decreases,
amends and restates in its entirety that certain Amended and Restated Revolving
Promissory Note dated March ___, 2003 from Borrower in favor of the Bank in the
maximum principal amount of Five Million Dollars ($5,000,000) (the “Prior
Note”). It is expressly agreed that the indebtedness evidenced by the Prior
Note has not been extinguished or discharged by this Note. All capitalized
terms used herein and not otherwise defined shall have the meanings given to
such terms in the Loan Agreement.



     Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.



     Bank is hereby authorized by Borrower to endorse on Bank’s books and
records each Advance made by Bank under this Note and the amount of each
payment or prepayment of principal of each such Advance received by Bank; it
being understood, however, that failure to make any such endorsement (or any
error in notation) shall not affect the obligations of Borrower with respect to
Advances made hereunder, and payments of principal by Borrower shall be
credited to Borrower notwithstanding the failure to make a notation (or any
errors in notation) thereof on such books and records.



     The occurrence of any one or more of the following events shall constitute
an event of default (individually, an “Event of Default” and collectively, the
“Events of Default”) under the terms of this Note:



          (a) The failure of Borrower to pay to Bank when due any and all amounts
payable by Borrower to Bank under the terms of this Note; or



          (b) The occurrence of an event of default (as defined therein) under the
terms and conditions of any of the other Loan Documents.



     Upon the occurrence of an Event of Default, at the option of Bank, all
amounts payable by Borrower to Bank under the terms of this Note shall
immediately become due and payable by Borrower to Bank without notice to
Borrower or any other person, and Bank shall have all of the rights, powers,
and remedies available under the terms of this Note, any of the other Loan
Documents and all applicable laws. Borrower and all endorsers, guarantors, and
other parties who may now or in the future be primarily or secondarily liable
for the payment of the indebtedness evidenced by this Note hereby severally
waive presentment, protest and demand, notice of protest, notice of demand and
of dishonor and non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without in any way
affecting the liability of Borrower, guarantors and endorsers.



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     Borrower promises to pay all costs and expense of collection of this Note
and to pay all reasonable attorneys’ fees incurred in such collection, whether
or not there is a suit or action, or in any suit or action to collect this Note
or in any appeal thereof. Borrower waives presentment, demand, protest, notice
of protest, notice of dishonor, notice of nonpayment, and any and all other
notices and demands in connection with the delivery, acceptance, performance
default or enforcement of this Note, as well as any applicable statutes of
limitations. No delay by Bank in exercising any power or right hereunder
shall operate as a waiver of any power or right. Time is of the essence as to
all obligations hereunder.



     This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.



     Borrower acknowledges and agrees that this Note shall be governed by the
laws of the State of Florida, excluding conflicts of laws principles, even
though for the convenience and at the request of Borrower, this Note may be
executed elsewhere.



     BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
OF COMPETENT JURISDICTION IN THE STATE OF FLORIDA IN ANY ACTION, SUIT, OR
PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF
OF THE COURTS OF FLORIDA, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND VENUE
IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES
AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT
TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.



[SIGNATURES APPEAR ON THE FOLLOWING PAGE]




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     IN WITNESS WHEREOF, Borrower has caused this Note to be executed under
seal by its duly authorized partners/officers as of the date first written
above.



	 	 	 
	WITNESS/ATTEST:

	 	THE ULTIMATE SOFTWARE GROUP, INC.
	 
	 	 
	


	 	By:________________________________(SEAL)

     Name:

     Title:







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AFFIDAVIT REGARDING DELIVERY

(attach to note or other written

obligation to pay money)




     I, _______________hereby certify that I am a
_______________of Silicon Valley Bank and that the foregoing Note or other
written obligation to pay money was delivered to me as a representative of
Silicon Valley Bank in the State of Georgia, County of _______________by
_______________of _______________.



	 	 	 
	 	 	
 

	 	 	Signature of Officer of Lender








     On this the _______________day of May, 2004, before me, the undersigned a Notary
Public in and for the State of Georgia, County of _______________, personally
known to me or proved to me on the basis of satisfactory evidence to be a
_______________of Silicon Valley Bank, that executed the foregoing affidavit on
behalf of such party and acknowledged to me that such party executed the
foregoing pursuant to its by-laws or a resolution of its board of directors,
said execution taking place in the State of Georgia, County of _______________.



	 	 	 
	 	 	
 

	

	 	Notary Signature
	 
	 	 
	

	 	My Commission Expires:

[Affix Notarial Seal]







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